Almost half of British companies plan to increase investment over the next 12 months, according to research published by Lloyds Banking Group, with 47 per cent intending to raise spending and 7 per cent reporting that their appetite to invest had decreased.

About three quarters of those surveyed said investment was “essential for future growth and resilience”. Confidence was highest among businesses in the East Midlands, Scotland, London and the northwest, Lloyds said, with most spending directed towards technology and artificial intelligence infrastructure.

Amanda Murphy, chief executive of business and commercial banking at Lloyds, said that “while many businesses have already secured funding for investment, a significant proportion have yet to deploy it”.

She said: “Investment drives productivity, competitiveness and long-term growth. Ensuring businesses have the confidence, funding and support to move forward will be critical.”

A fall in energy prices and stable economic conditions were among the factors that would prompt businesses to invest more, the research suggested. Rising operating costs, weaker trading conditions and liquidity constraints were among the biggest deterrents to increased spending.

Lloyds said businesses were most worried about the rising cost of production, which the bank said was likely to be tied to higher energy prices triggered by the Gulf conflict, poised to enter its sixth month. Renewed attacks between the United States and Iran have triggered a resurgence in the price of Brent crude, the international oil benchmark, which is trading at about $93 a barrel. The benchmark has moved sharply with each turn in the conflict since fighting began in February.

The findings echo a separate Lloyds survey at the end of June, which found that business confidence had dipped over the month amid persistent concerns about inflationary and cost pressures. The bank’s index of sentiment among private-sector companies dropped by 3 points to 44 per cent, below the 12-month average of 47 per cent, according to figures Lloyds published on 30 June. Economic optimism fell by 4 points to 31 per cent. The June barometer was based on responses from 1,200 firms.

Andy Burnham, the prime minister, is hoping for an increase in business investment, an area of weakness in the UK economy. Office for National Statistics figures published on 30 June show whole economy investment, which covers business and public sector spending, was 18.9 per cent of GDP in the first quarter of the year, the lowest of the G7 nations.

The same ONS release put business investment up 0.9 per cent in the first quarter, though still 1.3 per cent below the level recorded in the same quarter a year earlier. Transport was the largest contributor to the quarterly increase.

Political instability has added to uncertainty for businesses in the UK, with Burnham becoming the fifth prime minister in four years. He has promised to be “a pro-business leader of the Labour Party, as I was a pro-business mayor of Greater Manchester”.

Last week he cut business rates for pubs, clubs and live music venues in England by 20 per cent, which he described as “a first step” for struggling companies. Bosses have called for the government to go further and fundamentally reform the business rates system, which was overhauled in last November’s Budget with the end of the relief scheme introduced in 2020.